Schumer Backs Wind-Damage Coverage in Flood Insurance Overhaul

At least one influential Senate Democrat wants to expand the federal flood insurance program to allow property owners to purchase coverage for wind damage as well, setting up a potential clash with Republicans.

Sen. Charles E. Schumer, D-N.Y., praised the flood insurance overhaul bill (HR 3121) passed last week by the House, noting it would allow individuals and businesses to purchase wind-damage coverage through the National Flood Insurance Program.

“I believe we should do the same in the Senate, and will work toward that,” said Schumer, a senior member of the Senate Banking, Housing and Urban Affairs Committee, which has jurisdiction over the issue.

The proposed coverage expansion is an outgrowth of insurance disputes that arose after Hurricane Katrina devastated the Gulf Coast in 2005.

The wind damage provision in the House bill was pushed by Mississippi Democrat Gene Taylor, one of hundreds of thousands of Gulf Coast residents whose homes were destroyed by Katrina, and who then saw their insurance claims denied when they sought to collect. The industry asserted that homes and businesses were destroyed by flooding, covered by the federal program, and not by wind damage, which private policies cover.

Taylor argued that homeowners should be able to purchase coverage for both types of damage through the federal program. But the administration opposes such a move, arguing it would crowd out private insurers and expose the federal program to added financial risks. The White House has threatened to veto a bill that includes such a provision.

The Senate has not yet begun work on its version of a flood insurance overhaul.
Source: CQ Today Midday Update
Political Clippings compiled from BNN Frontrunner and CQ Politics.com.
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